China-Swiss Talks Deepen Financial Ties

The head of Switzerland's banking association was optimistic following the third round of talks between government, central bank and regulatory officials of the alpine nation and the Middle Kingdom.

A roundtable of Chinese and Swiss officials is meant to deepen financial sector ties between the two countries. Switzerland has campaigned to become a hub for renminbi trading, and China Construction Bank's Zurich branch was approved to clear renminbi trades nearly one year ago. 

Switzerland is ranked third in foreign financial centers trading the Chinese currency, behind London and Frankfurt.

The latest instalment of talks between China and Switzerland, held in Geneva, brought little tangible news but deepened relations between the two countries, Swiss Bankers Association chairman Herbert Scheidt told finews.asia in an interview.

Growing International Competition 

«The most important element of this roundtable isn’t necessarily to come away with a tangible deal, but to deepen our relationship and cement the existing cooperation,» Scheidt said.

«Of course other financial centers such as London are jockeying for position with China as well, and I can only assume that Britain will step up its efforts following the result of the Brexit referendum this past June.»

Switzerland's free trade agreement with China came into force two years ago, and the banking powerhouse is keen to do more business with the economic powerhouse in Asia – something which is heavily linked to political developments.

Chinese Banks Headed for Switzerland?

«As the third-largest renminbi trading hub, Switzerland is in pole position to to do more of this business, particularly when the currency becomes fully convertible,» Scheidt said.

He indicated that other Chinese banks are looking to enter the Swiss market following CCB's move last year. 

«I don’t have specific news on this, but it’s definitely something we would welcome and I gained the feeling during the roundtable that one or more Chinese institutes are considering opening a branch in Switzerland.»

China is keen to benefit from Switzerland's wealth management expertise in educating and training potential bankers. 

The F4 Alliance

«This would represent a next step in our cooperation,» Scheidt said, indicating that relatively basic questions of structures and products for wealth management as well as consumer protection were potential topics.

«China likes working with nations which have a 'free trade' mentality.»

While Britain is a competitor for renminbi business, it also figures into the Swiss lobby's efforts following the Brexit vote to link up financial centers London, Switzerland, Singapore and Hong Kong into a so-called F4 alliance.

 

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